The aluminium consumption surprisingly turned strong in the closing months of 1996 and thus consumption in the Western world touched the level of 17.6 million tonnes in the year 1996 as compared to 17.4 million tonnes in the year 1995.
The aluminium production also increased to 15.6 million tonnes in 1996 as compared to 14.6 million tonnes in the last year. The stocks were 2682000 T by end of 1996 as compared to 2804000 T by the end of year 1995.
The demand is likely to grow at a faster rate than industrial production between now and 1999. Even though idled capacities are lieing slowly recommissioned, supply will continue to run behind demand and it has been projected that there will be deficit of about 0. 4 million tonnes during 1997. Further, the rate of commissioning of new smelter capacities will also be very slow and gap in supply demand will continue. The net eastern export will also remain high to meet the growing demand.
The trend of international prices shows that prices were either always remained too high or too low. It has been projected that after the very low prices in late 1996, the tight supply demand balance will force a period of very high prices and increase is expected to go up by 80 per cent by late 1999.
Domestic Aluminium Scenario.
From the various studies conducted by the working group, with annual GDP growth of 7 per cent, the domestic consumption of metal in the year 1997 - 98 to 2001 - 2002 would be as under :
The overall growth in downstream is expected to be around eight per cent while in individual products, it will vary.
Though, the country has vast deposit of bauxite (about 3000 million tonnes), skilled manpower, abundant natural resources, low cost of production and a vast domestic market, the domestic aluminium industry is facing growth constraint due to high cost for setting up new smelter, insufficient technology base, absence of international marketing network and paucity of fund.
The overall growth of economy with a gross domestic product growth rate of 6 - 7 per cent p.a., is quite related to state of the economy, is bound to receive a strong and sustained boost in the changed scenario. Also on account of the opening up of the economy, the growth opportunities for the aluminium industry are indeed many. The downstream sector in aluminium in India and its environment is replete with opportunities.
Both the existing primary and the downstream producers, with many new players are consolidating / strengthening and expanding their manufacturing / additional capacity. The additional 2,00,000 T of rolled capacity would be coming with expansion plans.
